Indian sales of vehicles - including cars, trucks, buses, utility vehicles, motor cycles and scooters - jumped an annual 26.4% in 2009/10 (y/e March 2010) to a record 12.3m units according to the Society of Automobile Manufacturers (SIAM). This exceeded the previous record of 10.12 m vehicles sold in 2006/07, before the unfolding global financial crisis in the years 2008 and 2009. Car sales rose an annualised 20.1% in March to 155,600 cars; customers advanced their purchases ahead of price rises on April 1 due to new emission norms related expenses and rising raw material costs. Sales of trucks and buses, a barometer of economic activity, rose 61.2% to 67,362 units in the month. Looking ahead, the year to March 2011 is expected to see vehicle sales at a record high for the second year running. Mr Pawan Goenka, President of SIAM expects passenger vehicle sales, including cars and utility vehicles, to rise about 17% p.a. to reach 4.5 m units by 2015/16, with the total value of the auto industry reaching $145bn. Our view is that 16-17% p.a. growth looks ambitious, but maybe achievable as economic growth returns to trend. For the year to March 2010 car sales rose 25.6% to 1.95 units, albeit from a low base.

David Fuller's view Following a successful test of support from its rising 200-day moving average, the Sensex Index (weekly & daily) moved steadily higher to test lateral resistance and the psychological 18,000 level.

While it is technically overbought in the short term, a downward dynamic is required to indicate some further reaction and consolidation before extensive underlying trading supports higher levels. The Bombay Banks Index (weekly & daily) has provided a positive lead although it is susceptible to some consolidation of gains before long, having advanced for nine consecutive weeks.